The crosscountry data that we use for the regression
analysis are only available for total manufacturing,
because numerous industry level observations
have been suppressed at the source for reasons of confidentiality.
Yet, the large interindustry differences
illustrated by Table 1 suggest that the industry distribution
of affiliates may show through in the figures for
total manufacturing. For example, in Sweden, most
US investment is in machinery, which clearly is the
most “licensing-intensive” industry group, and technology
payments can be expected to be high for this
reason alone. It is even possible that the industry
effects dominate other explanations for crosscountry
differences in technology imports. To come around
this problem, we have therefore constructed some
alternatives to the simple LICENSE measure.